Binance staff exploited users’ crypto trades for personal gain, whistleblower

The Commodities and Futures Trading Commission has widened its probe into crypto exchange Binance after a tip-off from a company insider.

A US markets watchdog has widened its investigation of Binance to alleged insider trading — rounding out a slew of probes to hit the top crypto exchange this year.

The Commodities and Futures Trading Commission (CFTC) is looking into whether Binance staff abused their access to millions of customer transactions to manipulate crypto markets for personal gain, reports Bloomberg

CFTC investigators are said to be following up a tip from an anonymous whistleblower, who claimed insiders traded with knowledge of customer orders before executing them.

In a statement to Bloomberg, a Binance spokesperson maintained the company has “zero-tolerance” for insider trading, as well as a “strict ethical code” to prevent harm to its users and the crypto industry at large.

They also claimed Binance has internal guidelines for investigating wrongdoing, and said termination was the minimum response.

Binance summons three letter agencies to crypto

These allegations are just the latest in a long line to dog the Cayman Islands-registered company this year.

The CFTC probed Binance in March over whether US citizens had access to its crypto derivatives, such as Bitcoin futures.

Binance isn’t registered with the CFTC, so it can’t legally offer crypto derivatives to US residents.

Binance Holdings is the elusive firm behind global exchange Binance[dot]com.

In May, Binance attracted the US Internal Revenue Service (IRS) and Department of Justice (DoJ) over potential money laundering on its platform.

The IRS and DoJ were spurred on by a report from analytics firm Chainalysis, which claimed Binance attracted more than a quarter of the $2.8 billion in criminally-tied Bitcoin detected on crypto exchanges in 2019.

Binance draws worldwide scrutiny

India’s anti-money laundering agency in July opened an investigation into Binance subsidiary WazirX for potentially allowing the washing of more than $134 million for local gambling apps.

Specifically, Indian authorities claimed WazirX failed to vet its users and their transactions, violating the country’s Foreign Exchange Act.

Probes aside, a raft of countries have moved to eject Binance this year.

In June, the UK’s Financial Conduct Authority (FCA) banned it from carrying out any regulated activity in the country.

Cryptocurrencies are not regulated in the UK, however the FCA’s action does preclude Binance from offering crypto derivatives trade.

The Dutch central bank is no fan of Binance.

Read more: [Binance ‘Chutes and Ladders’ ends where it started: Hong Kong]

So too did Malaysia, which banned it in August for operating an illegal digital asset exchange, and South Korea, which forced Binance to severely trim its product offerings.

Ontario, Italy, Thailand, the Netherlands, Poland, the Cayman Islands, Singapore, Hong Kong, and Japan also either sent Binance warnings or booted it altogether in 2021.

Looking for bite-sized news? We’re on Twitter.

Was this article interesting? Share it